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Title:Optimal income taxation with tax competition PDF Logo
Authors:Lipatov, Vilen
Weichenrieder, Alfons J.
Issue Date:2010
Series/Report no.:CESifo working paper Public Finance 3108
Abstract:We introduce tax competition for mobile labor into an optimal-taxation model with two skill levels. We analyze a symmetric subgame-perfect Nash equilibrium of the game between two governments and two taxpayer populations. Tax competition reduces the distortion from the informational asymmetry and increases employment of the less productive individuals. When countries are heterogeneous, this effect is more pronounced in the smaller country.
Subjects:optimal income tax
tax competition
Leviathan government
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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